Although the controversial bailout plan for the Sogo Co. department store chain and its group firms was eventually scrapped when the group filed for court-mandated rehabilitation this week, Chief Cabinet Secretary Hidenao Nakagawa is not sure how the government will handle similar cases in the future.
"It is difficult to set clear-cut standards" for government decisions on whether loans to troubled companies should be forgiven," Nakagawa said in an interview. "It depends on each individual case," He did not rule out the possibility of the government deciding to bail out firms like Sogo.
Based on Sogo's original bailout plan, the Deposit Insurance Corp., a semigovernmental bank safety net, initially said it would waive 97 billion yen of the 197.6 billion yen in loans to Sogo that it had taken over from Shinsei Bank, formerly the Long-Term Credit Bank of Japan.